Business

Sony Ericsson to close RTP site

Posted November 18, 2009 11:43 a.m. EST
Updated November 19, 2009 8:37 a.m. EST

— Mobile phone handset maker Sony Ericsson announced Wednesday that it will close its operation in Research Triangle Park, eliminating 420 jobs.

Officials didn't provide a date for the closure of the plant, which served as its North American headquarters and research operation, but they said the move would occur by the middle of next year. Seattle; Miami; San Diego; Kista, Sweden; and Chennai, India.

Sony Ericsson will move its U.S. headquarters to Atlanta, and its R&D unit will be shifted to California, officials said during an employee meeting Wednesday morning.

Officials said some people will be offered jobs at the new sites, but it's unclear how many will move.

"At the end of the day, we have to keep creating and keeping our jobs here," Gov. Beverly Perdue said. "I can't afford to lose companies – none of us can – and we have to work harder and more aggressively on creating jobs."

The shutdown is the latest blow for the joint venture between Swedish communications company LM Ericsson and Japanese electronics giant Sony Corp. A year ago, it eliminated 450 RTP jobs as part of 2,000 layoffs company wide.

The current round of cuts also is expected to be about 2,000 company wide, officials said.

“This cost reduction program is to increase efficiency company wide and help us remain agile,” spokeswoman Stacy Doster said.

Sony Ericsson lost $245 million in the quarter that ended Sept. 30, as its sales fell more than 40 percent, to $2.4 billion. Still, the company was able to line up $676 million in financing to strengthen its balance sheet.

The company is the sixth to lay off workers in RTP this year, according to information from the state Employment Security Commission. Others include IBM Corp., Cisco Systems Inc. and NetApp Inc.

Morrisville, which abuts the research park, has had nine companies, including computer maker Lenovo Group Ltd., close or lay off employees this year, according to ESC records.

Meanwhile, 600 people lost their jobs Wednesday at the Dell Inc. computer plant in Winston-Salem. The company announced last month that it would close the 4-year-old plant and lay off all 900 workers by January.

"We need to help the folks who've lost jobs, who are losing jobs before the holiday season, (to) get into other work force opportunities," Perdue said.